Why do PMs find the civil service so hard to reform?

David Cameron is next month expected to unveil a major shake-up of the civil service. What makes this prime minister think he will succeed where so many others have failed?

Lord Butler, who criticised what he saw as Tony Blair's overly informal "sofa government" style, knows a thing or two about civil service reform.

He was head of this vast organisation in the early Blair years, leaving government shortly before Mr Blair's famous 1999 speech in which he complained about the "scars on my back" from civil servants and others who stood in the way of his reforms of schools and hospitals.

David Cameron's reported frustrations with the machinery of government, and the discovery that policy levers are not necessarily connected to anything, must seem very familiar to the crossbench peer.

As must Mr Cameron's rhetoric about "government bureaucrats" being the "enemies of enterprise" and reports that some in government think civil servants are "lazy" and give "useless" advice.

Lord Butler was head of the civil service from 1988 to 1998 and saw through a set of reforms known as "Next Steps" in the late 1980s, which focused on improving efficiency and management.

'No incentives'

Change in the civil service, he says, can be "like turning round an oil tanker" but it has edged forward over the past 30 years.

It's a hearts and minds thingLord Butler of Brockwell, former head of the civil service

How typical of a civil servant, a politician might say, to think in such vast periods of time when all that matters is the next election. How typically shallow and short-termist of a politician, the civil servant might reply.

Another traditional gulf in understanding between civil servants and their political masters is when it comes to business.

Prime ministers from Ted Heath in the early 1970s onwards have tried to import business practices into government in an attempt to run UK PLC like a FTSE 100 industrial powerhouse; with varying degrees of success.

At a recent speech the Cabinet Office Minister Francis Maude, who is in charge of the latest reform attempt, said "Whitehall has traditionally focused on policy - not on running like a business".

He has brought in dozens of City grandees as "non-executive directors" - headed by former BP chief Lord Browne - to sit on the boards of government departments.

But the entrepreneurial spirit can sometimes seem to be in short supply in Whitehall.

The reason for this, says Lord Butler, is that there are "no incentives" for civil servants to behave like an entrepreneur. In fact, he says, the incentives work in the opposite direction.

'Seven tests'

Civil servants miss out on the positives associated with being a business leader, like profits generated from their work, but they do get "landed in it" if it all goes wrong.

The civil service in numbers

The civil service is at its smallest since WWII with 444,000 employees

The highest number of civil servants post WWII was 746,000 in 1977

Almost three-quarters of permanent civil servants work at one of the four largest departments: DWP (23.1%), HMRC (15.9%), MOD (15.3%) and MOJ (15.9%).

Women have made up more than half of civil servants since 2001.

The percentage of ethnic minority civil servants has increased by more than half since 1999, to 9.2% in 2011.

Source: Civil service statistics, ONS

There is also, in Lord Butler's view, an important difference between the public sector and the private sector in that business can choose who it serves, allowing it more flexibility.

"In the past governments have talked about customers or clients of public services. But while business can choose theirs, government has to treat everyone fairly," he says.

Peter Thomas, author of a new report by the
Institute for Government
think tank, which sets "seven tests" for the government's reform plans, says the civil service sometimes needs an external trigger to bring about change.

'Bold vision'

"The civil service is great at reacting to crises like foot and mouth and the banking crisis but it's not as good at making continual improvement. It needs an imperative," the former civil servant says.

Lord Butler and Mr Thomas agree that the "unprecedented" level of cuts the civil service is facing will make things different this time around.

But, they argue, that could be a problem if the reform process becomes just about making savings and not about making the civil service work better.

"It's not just about cuts but about making the civil service fit for purpose in 10 years' time. What's the reason to make the change? There needs to be a real focus on what's going to be different," Mr Thomas says.

In his view, the government needs "a bold vision" and a positive future for civil servants or it could be facing failure.

The civil service is smart and will look to how David Cameron and Francis Maude behave and whether they back themPeter Thomas, Institute for Government

Lord Butler agrees saying "it's a hearts and minds thing" and civil servants need to be engaged and "carried along" with the process if it is to succeed.

"The civil service do want to do a good job and be empowered to do it," he says.

But no one should underestimate the importance of leadership.

"Getting commitment from the very top" is one of Lord Butler's "golden rules" for reform, pointing to Margaret Thatcher as someone who championed change and judged people by their ability to achieve it.

Looking at the current generation of leaders, Peter Thomas thinks there are reasons to be hopeful.

Political backing

The civil servants tasked with putting any reforms into action, Mr Thomas says, grew up with the reforms of Mrs Thatcher and are well used to organisational change.

"The profiles, diversity and attitudes of permanent secretaries are very different from 10 years ago. They are more corporate, more managerial, more collaborative," he adds.

Plus the government has a strong team - Cabinet Secretary Sir Jeremy Heywood and Head of the Home Civil Service Sir Bob Kerslake - to take the lead, he says.

"Jeremy has more capability to get backing and trust than anyone for a long time and Bob has a background in local government and making things happen," Mr Thomas argues.

Institute for Government's seven tests for successful reform

Is there a clear direction of travel for reforms that people understand and support?

Does the plan address strategic issues like "value for money" and better policy making?

Is work beginning now to identify cross-departmental savings for the next spending review?

Is it clear how ideas will be turned into actions?

Is the dual civil service leadership of Sir Bob and Sir Jeremy effective?

Is there the right political support, including from the prime minister?

Are senior leaders in the civil service committed to leading the plan?

However both men will need the support of their political masters.

"The civil service is smart and will look to how David Cameron and Francis Maude behave and whether they back them," he adds.

Their reactions, along with those of Sir Bob and Sir Jeremy will be all important when the reform plan is published.

So what could be in it?

Expect plans to make it easier to fire poorly performing staff - as promised in the coalition agreement - which could meet stiff resistance from the unions.

But an even more controversial idea could be handing responsibility for policy development to outsiders.

Such work is at the very core of what civil servants do and they may not take kindly to it being outsourced to charities, businesses or think tanks.

Francis Maude has said he wants a "smaller, more agile and more responsive" civil service.

Lord Butler's experience has proved that the civil service is capable of change, but with a backdrop of deep cuts in budgets and redundancies, Mr Maude may have a fight on his hands to ensure his plans do not join so many others in the dustbin of history.